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Predicted impact of the Coronavirus outbreak on US inbound travel from China



By
28 February 2020 (Edited 28 February 2020)

54% of US inbound travel from China is discretionary


Travelers arriving on the last flight from Hong Kong before Boston Logan Airport was closed to flights from China

Hotel consultants HVS have published an exhaustive analysis of likely effects of the 2020 Coronavirus outbreak on US inbound tourism, based on historical data from the earlier SARS and Zika Virus outbreaks.

Some key points:

The two largest segments of inbound travel from China - Vacation/Holiday (accounting for 32% in 2018) and Visit Friends/Relatives (22%) - fall into the category of discretionary travel. Although much of the Vacation/Holiday outbound travel from China is done as package tours - and tour operators will be making every effort to recover business as soon as possible - timing and pace of recovery of these segments will be unpredictable as subject to the actions of individual travelers.

Business travel is likely to be the first segment to recover, motivated by desire for making quarterly and annual sales numbers.

Education should be the segment least affected by the Coronavirus outbreak, since most students were already at their schools for the first semester of 2019-2020 at the time of the outbreak.

Economic impact:

Based on 2018 figures, the Education segment - assumed to suffer the least economic effect of the outbreak - represents 18.2% of visitor numbers from China and 43.1% of spend. That leaves a balance of 81.8% of visitors and 56.9% of spend more seriously exposed to economic impact.

Geographic distribution of economic impact:

Visitation to the US from China isn't evenly distributed over regions. Economic impact by region can be expected to reflect the following trends (2018 figures):

  • Pacific 42.4%
  • Middle Atlantic 29.3%
  • South Atlantic 17.7%
  • Mountain 14.9%
  • East North Central 11.5%
  • New England 10.9%
  • Pacific Islands 6.5%
  • West South Central 5.4%

Primary metropolitan destinations of visitors from China have historically been:

  • Pacific: Los Angeles (23.4%), San Francisco (14.1%)
  • Middle Atlantic: NYC (24.5%)
  • Mountain: Las Vegas (10,3%)
  • New England: Boston (8.8%)
  • South Atlantic: DC (7.6%)

Impact of length of stay on hotel bookings:

Because the US is a long-haul destination for visitors from China, in 2018, 55% of visitors from China stayed in the US 8 to 13 days, and 21% stayed longer.

Prospects for recovery:

Based on historical data from travel patterns following earlier pandemics, travel could recover relatively quickly. And the China market for US tourism can be expected to continue to expand as the current trade tensions are resolved.

Comments:

I encourage you to read the entire thoughtful HVS report, behind the External Article link, below.

I admire the optimism of the HVS analysts, but it's early in the game yet. Continuation of travel bans past Spring 2020 would be very bad news for the travel industry globally as well in the US. Stay tuned for updates.


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David Boggs    - David
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External Article: https://www.hvs.com/article/8688/pandemics-and-the-lodging-industry/



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